Refinancing in a Checkbook Self-Managed IRA

[Brian L Dowler]

I am a relatively new investor, just started my second investment property. To kick things into high gear, I am setting up a self-managed IRA with and LLC, giving me checkbook control. As I am well down the W-2 path, I am fortunate to have a decent amount in here, enough to do at least one and possibly two deals at once, both purchase and rehab, in my market. I am aware of the restrictions enforced by the IRS on what I can and cannot do in terms of ineligible partners, etc.

If would then want to BRRRR and restore my cash after refinancing. I have found a hard money lender willing to do this 90 days after closing, current rates around 6%. I would prefer to find a portfolio lender, small bank etc. willing to do this, perhaps at lower rates. I have called some small S&L's etc. near me, but many do not write loans to an LLC or to a self-managed IRA. Or they want 30-50% down and points on a non-recourse loan.

Are there any "self-managed IRA investors" out there willing to give me a few tips? If you have experience and have some refinanceing ideas, I would love to hear from you.

[Brian L Dowler]

Jerry, if I purchase the house and finance the rehab from the self-directed IRA, all costs and income have to go back into the IRA. I cannot pull the house out of the IRA until I hit 59 1/2 years old, and if I pull it out then I would be subject to paying tax. So the refinance has to be to the LLC in the IRA.